We made mistakes in India mobile strategy: LG

The head of LG in India has said that the company 'made mistakes' in its mobile phone product strategy which has been the reason behind its poor performance in the fast-growing segment.Pankaj Doval | TNN | February 23, 2017, 08:19 IST

The company, which has a low single-digit market share, is now banking on locally-developed models to turn around its devices business as it re-focuses on the category that contributes less than Rs 1,000 crore to the annual revenue of Rs 22,000 crore.

"We made mistakes earlier... our products are not attractive enough for Indian customers as yet," Kim Ki Wan, MD of LG India, told TOI here. The performance of the top Korean electronics giant in the Indian mobile phone market is in stark contrast to traditional rival and compatriot Samsung that commands a strong grip on the category. And adding to the worries of LG is the growing dominance of Chinese companies such as Huawei, Vivo, Oppo and Gionee.

Wan said that the Chinese companies had been gaining share on the back of massive price subsidies and heavy marketing spends, something "not sustainable" in the long-term. "When the cost (of manufacturing a phone) is similar, the price gap (between products) cannot be big... I don't understand how long they can last with this aggressive marketing investment."

The company, however, has been a laggard in the phone business, despite a strong presence in the consumer electronics and home appliances categories. Several attempts at giving a push to the phone business, which has earned rich dividends to relatively-new and homegrown brands such as Micromax, Karbonn and Lava, have failed. Wan has accorded "top priority" to the revival of phone operations, especially as India has moved rapidly to become the top market in the world, behind only China. "We are focused on developing India-specific designs and functions to make a differentiation when compared to our competitors."

The company is now launching locally-researched models that it is sourcing from a factory run by contract manufacturer Wistron. "India is huge and diverse, and we have studied this market over the last few years. Now step-by-step, we are coming up with new devices with specific local functions."

A new device, K10, was launched by the company for Rs 14,000 and this has a 'panic button', in line with the government's views on having an enhanced safety apparatus on devices. Speaking about the consumer electronics market, Wan said that there are uncertainties due to certain global factors. The protectionist voice from the Trump administration in the US has also impacted the sentiments among buyers.